The global financial crisis of 2008 has slowly yielded to a global unemployment crisis. This unemployment crisis will, fairly quickly, give way to a political crisis. The crisis involves all three of the major pillars of the global system — Europe, China and the United States. The level of intensity differs, the political response differs and the relationship to the financial crisis differs. But there is a common element, which is that unemployment is increasingly replacing finance as the central problem of the financial system.
Europe is the focal point of this crisis. Last week Italy held elections, and the party that won the most votes — with about a quarter of the total — was a brand-new group called the Five Star Movement that is led by a professional comedian. Two things are of interest about this movement. First, one of its central pillars is the call for defaulting on a part of Italy’s debt as the lesser of evils. The second is that Italy, with 11.2 percent unemployment, is far from the worst case of unemployment in the European Union. Nevertheless, Italy is breeding radical parties deeply opposed to the austerity policies currently in place.
The core debate in Europe has been how to solve the sovereign debt crisis and the resulting threat to Europe’s banks. The issue was who would bear the burden of stabilizing the system. The argument that won the day, particularly among Europe’s elites, was that what Europe needed was austerity, that government spending had to be dramatically restrained so that sovereign debt — however restructured it might be — would not default.
One of the consequences of austerity is recession. The economies of many European countries, especially those in the eurozone, are now contracting, since austerity obviously means that less money will be available to purchase goods and services. If the primary goal is to stabilize the financial system, it makes sense. But whether financial stability can remain the primary goal depends on a consensus involving broad sectors of society. When unemployment emerges, that consensus shifts and the focus shifts with it. When unemployment becomes intense, then the entire political system can shift. From my point of view, the Italian election was the first, but expected, tremor………………………………
full article at source: http://www.marketoracle.co.uk/Article39333.html
The unemployment rate in the EU reached a record high of 10.7% in November 2012, according to figures published earlier this week by eurostat. Youth unemployment, in particular, has been consistently gloomy since the beginning of the crisis, with almost 1 in 4 young people in the European Union now out of work.
Youth unemployment was highest in Greece (57.6%) and Spain (56.5%), and last year we had a comment sent in from a young Spanish jobseeker, Javier, who told a depressing (but perhaps all too common) story:
My personal experience is that I could not find a job so I continued to study. Now, I had a job interview two days ago and I was told that my CV is ‘intimidating’, and that I know ‘too much’. So with studies or without studies, we are screwed…
We decided to put this comment to Santiago Fisas Ayxela, an MEP with the centre-right European People’s Party group, to see how he would respond to Javier:
full article at source:http://www.debatingeurope.eu/2013/01/10/does-a-university-degree-make-a-difference-for-young-unemployed-europeans/
By Julia Kollewe
Unemployment in the eurozone has risen to a new high, with Spain recording the highest jobless rate with more than one in four out of work.
There are now 18.49 million people without jobs in the 17 countries sharing the euro, European statistics office Eurostat said on Wednesday, with an extra 146,000 joining the ranks of the unemployed last month. The jobless rate increased to 11.6% in September, the highest on record, from a revised 11.5% in August.
“With surveys suggesting that firms are becoming more reluctant to hire, the eurozone unemployment rate looks set to rise further, placing more pressure on struggling households,” said Ben May, European economist at Capital Economics.
The lowest unemployment rates were recorded in Austria (4.4%), Luxembourg (5.2%), Germany and the Netherlands (both 5.4%), which are near full employment. Spain (25.8%) and Greece (25.1% in July) had the highest unemployment in the eurozone, while France looks much like Italy (both at 10.8%), with a steady rise in joblessness. August data for Greece will be published next week, although the true picture is probably worse, as a growing number of Greek workers remain nominally employed but have not been paid for some time………………
full article at source:http://www.guardian.co.uk/business/2012/oct/31/eurozone-unemployment-record-high-eurostat
By Staff at the Daily Bell
Spanish unemployment hits new peak … One in four Spanish workers are now without a job. Spain’s unemployment rate hit a record high of 25% in the third quarter, as the jobless total grew to nearly 5.8 million people. The latest unemployment data reflects the impact of the region’s recession, and Spain’s government cuts aimed at restoring stability to the country’s finances. The national statistics office said unemployment in the July to September period rose 0.4%, compared to the previous quarter; and 3.5% compared to the year prior, as another 85,000 people were left without work. – CNN
Dominant Social Theme: We shall overcome. This is merely another challenge for civilized society.
Free-Market Analysis: Sometimes dominant social themes and sub-dominant social themes are unstated instead of stated.
One out of every four Spanish workers is now without a job. This is a full-fledged depression by any standard. This statistic is topped by another one, that 50 percent of Spanish youth is unemployed.
The larger unstated dominant social theme is that unemployment and subsequent suffering are simply part of life. The sub-dominant theme is that austerity is a necessary part of the solution.
Fear is an essential element. Unemployment is a fact of life and only government programs can alleviate it……………….
full article at source: http://www.thedailybell.com/28224/Spain-Consequences-of-a-Generalized-Depression
By David Mc Williams
The headline in yesterday’s Irish Independent was eye-catching. It said that half of all Irish businesses are on the verge of collapse, according to stress tests carried out by business and credit risk company Vision-net.
Companies in the hospitality, construction, IT, motor, and wholesale and retail sectors are least likely to survive, Vision-net said. Added to this is the news that five companies went bust every day this month.
This news came on the day that the central bank pronounced that lending to the private sector continues to slide. On an annual basis, lending fell by 3.7 per cent, with mortgage lending down by 2.2 per cent and lending for consumption and other purposes down by 7.9 per cent in June.
Credit for companies also declined, down by 2.9 per cent on an annual basis. Loans to companies fell by €399 million during June, following a decrease of €338 million in May.
We also have new data showing a complete collapse in retail sales last month, more evidence that houses prices continue to fall, news that long-term unemployment has reached 200,000 and four out of every ten people on the dole have been out of a job for over a year. The picture painted by the most recent data, is one of a domestic economy that is grinding to a standstill. Far from recovering, this evidence screams that the domestic economy is getting weaker. People and companies aren’t borrowing, we are not spending and there are debt and cash flow problems emerging everywhere in the local market while long-term unemployment, the most significant indicator for absent demand, continues to rise.
full article at source: http://www.davidmcwilliams.ie/2012/08/03/whats-the-eus-endgame?utm_source=Website+Subscribers&utm_campaign=482d362db7-03082012&utm_medium=email
Comment: A excellent article and well worth the read!
Image by Aster-oid via Flickr
A Hopeless Case?
The IMF has just released its most recent assessment of the ‘progress’ of its austerity program in Greece. As a reminder, Greece currently ‘enjoys’ an economic depression that is more and more reminiscent of the downturn of the early 1930’s. Its GDP has been in contraction for 12 quarters running, most recently at an annualized rate of 5.5%. The rate of unemployment oscillates around the 18% mark – official unemployment, that is. Consumer confidence has collapsed, industrial production has been in decline at double digit rates since early 2008. The stock market is down by 90% from its 2007 highs and the government’s one year note yields an absurd 330%. The banking system is de facto bankrupt and subject to an accelerating flight of deposits.
You get the picture – these are the kind of economic data that normally indicate that the society concerned is only a small step away from major social upheaval and a descent into conditions of chaos. At the very extreme end of such a process it could experience what is essentially a collapse of civilization, with the division of labor increasingly breaking down and society transmogrifying into a collection of small islands of autarkic, primitive hand-to-mouth economic units that no longer even trade with each other.
To everybody’s vast surprise, the IMF has just concluded that Greece once again ‘failed to meet its targets’ as per the austerity program imposed on it by its bailout lenders.
full article at source: http://www.acting-man.com/?p=12489